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GM Approved To Build $1.3 Billion Cadillac Assembly Plant In China

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General Motors has announced that it has gained regulatory approval to build a $1.3 billion USD (8 billion yuan RMB) assembly plant in China dedicated to producing Cadillac models for the Chinese domestic market. The plant is expected to produce 150,000 vehicles annually, and groundbreaking is set to take place this Junetook place June 19th.

China’s National Development and Reform Commission has signed off on the plant, which will be located in Shanghai’s Jinqiao zone. The new plant will allow GM to avoid paying China’s 25 percent tariff on imports, and therefore is expected to increase Cadillac’s notoriously-low sales in the region.

Currently, all but one Cadillac sold in China is imported into China (the exception being the long-wheelbase STS called the SLS), and therefore assessed the hefty import tax. This event has hamstrung Cadillac to sell just 30,010 models in China in all of 2012. Meanwhile, Audi — which manufactures its Chinese-market cars in China — sold 405,838 units during the same time period.

The new plant will likely begin producing the ATS, 2014 CTS, SRX, and XTS within the first several years of its existence.

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“To compare, Cadillac sold just 30,010 models in China last year, while Audi sold 405,838.”

30010 / 405838 = 0.073945762 or 7.39%

Math is fun, and insightful. Just remember that percentage figure the next time you hear someone spout “GM is exporting US jobs to China”. At present, with exports from the US, Cadillac is a nobody in China and that has nothing to do with “exporting US jobs”. Cadillac needs to build it’s image in China just as much as needs to everywhere else on earth. The 25% tariff isn’t exactly helping the image building process.

But then again, it’s also important to remember that when the factory is up and running, there is nothing to guarantee that Cadillac will reach 400K+ sales in China every year.